STATE OF CALIFORNIA GAVIN NEWTSOM, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102?3298

 

 

June 2, 2020
Re: Commission Regulations for Charter?Party Carriers and Assembly Bill 5
Dear Transportation Network Company Representatives:

This serves as a reminder that California statutes and the Comm ission?s regulations require all
charter?party carriers under the Commission?s jurisdiction to provide, for their employees, a
certi?cate of workers? compensation coverage issued by an admitted insurer, or a certi?cation of
consent to self-insure issued by the Director of Industrial Relations per California Pub. Util. (PU)
Codes 5374(a)(l)(G) and 5378.1.

TNCS are chatter-party carriers per the Commission?s General Order 157?13?, 2.13. Regarding the
classi?cation of TNC drivers, we draw your attention to Assembly Bill 5 (AB 5), which was signed
into law by Governor Newsom on September 18, 2019 and became effective on January 1, 2020.1
AB 5 becomes effective for workers? compensation requirements on July 1, 2020. Among other
requirements, AB 5 modifies the California Labor Code to direct that a person providing labor or
services for remuneration shall be considered an employee rather than an independent contractor
unless the hiring entity demonstrates that all of the following conditions are satisfied:

A. The person is free from the control and direction of the hiring entity in connection with the
performance of the work, both under the contract for the performance of the work and in fact.

B. The person performs work that is outside the usual course of the hiring entity?s business.

C. The person is customarily engaged in an independently established trade, occupation, or
business of the same nature as that involved in the work performed.

PU Code 5378 authorizes the Commission to cancel, revoke, or suspend a carrier?s operating
authority, and to fine a carrier, for violations of the Passenger Charter-party Carriers Act, which
commences with PU Code 5351. The Commission?s Consumer Protection and Enforcement
Division (CPED) monitors and enforces compliance with the Commission?s regulations.

Don Ito

Director, Consumer Protection and Enforcement Division
916?713?4132
doug. ito@cpuc. ca. gov

Regards,

 

1On May 5, 2020, the state attorney general and the city attorneys of San Francisco, Los Angeles and San Diego sued
Uber and Lyft, stating they had misclassi?ed their err-demand drivers as independent contractors rather than employees.
The suit alleges that Uber and do not satisfy the three AB 5 factors for determining if their drivers qualify as
independent contractors, and therefore their drivers are employees,